As a result of the changes brought about by the proposed 2007 Finance Act, a situation has arisen in which companies like Global Taxback who actively promote Personal Service Companies run the risk, if they continue, of being liable for the tax saved by contractors. This transfer of Liability starts in August 2007 and will be further extended to Agencies in January 2008.

     These changes have caused uncertainty in the m arket which will probably only settle over the next few months as things become clearer. Global Visas along with most of its competitors have decided that the best option is to continue to provide Umbrella Companies, which enable a contractor to work 100% PAYE, and claim certain expenses. Whilst not necessarily the best option for the contractor, this is viewed as being a safer route for providers of managed service companies and employment agencies.

     To operate through a personal service company you will have to employ the services of an accountant, who will only provide accountancy support and have no company secretary or director involvement in the personal limited company.

     A number of players in the market have quickly established accounting divisions or are relying on the fact that they have an accountant sitting on their board of directors, and therefore continue to provide Personal Limited Company solutions. It remains to be seen whether or not this solution will work for both the provider and the contractor, however given the government's clear determination to tackle these tax vehicles it is unlikely that they represent a long term solution for the Personal Limited Company.

     Global Tax Back has taken the decision at the present time to offer only the Umbrella Company solution. In the meantime we shall continue to monitor both legislation and the market in case the Personal Limited Company should become a viable tax saving option again.